FOX News Shepard Smith Reporting Shepard Smith pulls together new technologies and social media to bring viewers the latest in news.

March 5, 201412:00 - 1:01pm PST

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it doesn't stop the fajitas, i'll struggle through the hardship. on facebook, joy writes, i can't stand the taste of guacamole, but i love mexican food. and finally, kevin tweets, gauc, well, i guess i can manage without it. i'm gretchen. now over to shep live in kiev. >> good evening from kiev in ukraine, where we're tracking developments that have ripped across this region. first from fox at 3:00 in new york city today, gunmen accused of detaining a high-ranking united nations representative outside a coffee shop. we have video from the scene and we'll show you what happened when he tried to leave. we're also hearing of fresh trouble in the eastern part of ukraine. plus, in just moments, i'll take you on a trip of crimea, where russia has asserted complete control. you'll see what it's like in the streets and why it's not all as it seems the there. we'll also look at how vladimir putin is imposing his will on the rest of the world and why right now, most analysts say,

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nobody can stop him. so let's get to it. >> announcer: now, shepard smith reporting live in ukraine. it's 3:00 on the east coast, noon on the west coast, 10:00 p.m. here in ukraine, where the crisis continues to unfold. and there are new developments to report tonight from kiev, and new signs that just one wrong move could bring big troubles here and around the world. i'm in independence square, and if we could come back live, i want to show you this area behind me. we're on a hill, just above independence square, and that's where police had a wall on the night that this thing all -- snipers began to take out the protesters in the streets. it happened repeatedly and it's the reason this thing has escalated to where it is. this now pits russia's president against really the rest of the world, or at least the western world, over the future of ukraine's critical crimea peninsula.

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my team and i went to crimea -- more on what we found and saw there in just a moment. but first, the tension in crimea has dramatically escalated in just the past few hours. while we were there, a mob surrounded a top united nations representative's car in crimea. we didn't witness it, but we have video. we're told the crowd is chanting, leave russia, or crimea is russia. it's unclear exactly who these people are. are they russians brought in? are they people from crimea? we cannot tell you. but we can see people waving russian flags, and even a soviet flag. earlier, u.n. officials say the armed men ambushed the u.n. official in his car and followed him when he took off on foot. they eventually trapped him in this coffee shop. u.n. officials now tell fox news that the representative was okay, but felt threatened at the time. meantime, the pro-russian power grab is spreading beyond crimea.

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rowdy russian activists fought cops and stormed a government building in ian ukraine. they raised the russian flag as crowds there cheered. all of these scenes, clear reminders that this standoff could easily reach a breaking point. tonight, here in ukraine, the hope is that face-to-face talks can diffuse the crisis before that can happen. our secretary of state, john kerry, met with his russian counterpart in paris. we do not know the outcome of that. in fact, they've not shown their faces since the meeting began. and for the first time, we're hearing from ukraine's new leader. he delivered a blunt message to president putin. the crimea peninsula is not up for grabs. >> yimcrimea is, was, and will an integral part of the state of ukraine. >> of course, the fact of the matter on the ground is that is not the truth. right now crimea belongs to the russians. i say that because the russians

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control every strategic point there. they control the naval facilities, they control the ports. and today, they took over two strategic defense areas, defense missile systems. it appears now they control just about everything. well, overnight, united states time, my crew and i flew down to crimea to get a look on the ground and we'll begin where we landed. we arrived at the airport midday. and everything seemed pretty normal. nobody bothering you, nobody asking questions, nobody staring you down in any strange way. the weather much better here than in the north. and then, over here at this gate that leads out of the airport, a man who professes to be a local from simferopol who is volunteering, with volunteer equipment, things that belong to himself, but one difference you might notice here, see the brand-new scotch tape on the fence post here holding up what is a brand-new russian flag. the changes are subtle.

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they are not in any way oppressive. but they're here. >> i saw the victims for the first time in my life and i was scared. >> she grew up here. last week when the russians arrived, she was frightened. >> i thought that it was the beginning of maybe war and an expectable war between ukraine and russia, because we know that russia now want to take the crimea. >> we've moved now to an area close to the center of simferopol. this is a transportation hub with the bus lines, you can see the electrified lines above. all of this built by the soviets. still feels very soviet times, except for a few new sidewalks, according to the locals, that have been installed in recent years. there's a statue of lennon still in the park, which to some disagree is still controversial. that said, you don't see russian troops here anywhere. that was from days ago.

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>> today is better and we can see that the airport the free and here we couldn't find any soldier. it's great news. >> and then there's this. this is a ukrainian naval station. you can see the ukrainian flag on the top. the man in front is waving a crimean flag. and the russian troops have come in, in essence taken the place over, and told the crimeans to surrender their weapons. some of those have been held inside for days. but they're not allowing any contact. that said, this has all become very much of a tourist attraction, with the media here from around the world. there is still tension. there's mo doubt. but it's much quieter than in recent days. so it all looks relatively calm and orderly. as you walk around the big centers and squares, in that city and in the rest of crimea, everything looks just fine.

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you don't see russian troops. but the fact is, the russians control every strategic position there. and that may be part of putin's brilliance, if you will, in this matter. the people who were on the ground seem to think and told us overnight, things seem better. there is calm. this will be fine. but the truth is, russia controls that city and the rest of crimea. the russians have violated the agreement of 1994 and wrested control of most experts and most experts now agree that the west will not be able to stop them. possession, after all, is nine tenths of the law. germany and the rest of europe show no signs that they'll absolutely sign on to sanctions, as john kerry now famously promised. further, there is the road of food in afghanistan to quiet future cries from the united states. and we'll get into the details of that in just a little bit. so the president's critics will blame him. the administration may find cover from european complacency, and putin will most likely tiptoe away from this with no

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shots fired, getting no real punishment, gaining a beautiful summer vacation land, and a crucial warm water port in the black sea. it looks at this point to most observers like it worked out even better than that little thing he did in georgia. if this was a mistake or a stroke of genius of putin, it certainly is looking like one. putin, at least at this point, wins. europe and the west look helpless, and those in crimea who had hoped to further their westernization through closer ties with europe are left wondering with what happened and how. so that's the situation on the ground at this moment. and for now, i want to go to p.j. crowley. pentagon is the former assistant secretary of state, now a professor of new practice at george washington university. p.j., right now, where the western nations' cards. where are the cards of the european union? where are the cards of the united states in playing against whatever it is that putin has dreamed up here? >> i think, shepard, first, and you're on the scene right there, you have to look at the

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sentiment inside ukraine, obviously, crimea is a unique situation within the country. i think, obviously, putin has achieved something that he desired. he's back at the table in terms of having the ability to influence what happens in ukraine. next, the revolution probably has slowed down a little bit. that said, putin is at risk of overplaying his hand. you'll have the sentiment on the ground there. but i sense that he has pushed ukraine to a level of solidarity, notwithstanding all of its cultural and historical differences. ukrainians of all stripes, those who are supporting the protesters, those who are supporting yanukovych are standing up right now for the sovereignty and stability of ukraine. >> they are, indeed, standing up, but they were protesting at one point, and now they seem to be coming together as a nation.

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but it's altogether unclear what it is that they will be able to do. because at this point, what putin has done is moved into crimea and crimea only. where russian sentiments are strong, where he has a lot of support, where people who came from the former soviet union and grew up in that system, some of them, seem quite happy. and even further, p.j., they're certainly manipulating the message in an interesting way. having all of these people who are there doing this protesting, 11 different areas around crimea and around the country today, there are very big questions about whether those people were actually brought in from russia and are there staged for the cameras that have come from around the world. >> i think, probably, it's a combination of the two. no doubt that there are some incidents that have happened that are based on indigenous factors. there's no question that russia has unleashed its propaganda machine and is staging a lot of these demonstrations to try to put, you know, a parallel

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reali reality behind, you know, put putin's words. it's probably a combination of the two. >> p.j. crowley live with us this afternoon. nice to see you, thanks so much. we're going to get to jennifer griffin next, because there's some very important developments that are coming from her. i mentioned a minute ago, this road of food into afghanistan. remember, we're still fighting the longest war in the history of our nation there. and there's a road that goes right through russia. and along that road travels the food for our troops. putin, it is said, has threatened to shut that road down. and if that happens, we have an entirely new set of problems. he knew that going in. in addition, there's word of leverage coming in the way of money from the pentagon. and jennifer griffin has all new information. we'll get to that as fox reports live this wednesday night from kiev on a cold, misty, and wonderous night where so many are concerned about what is going to happen to their country.

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on this? >> shepard, we've just learned the pentagon is sending six f-15 fighter jets to poland, also, an air refuelers. after relative silence from the pentagon and nato, hagel outlined the steps now being taken by the western military alliance. >> the defense department is pursuing members to support our allays, including stepping up joint training through our aviation department in poland. it's an area that i visited a few weeks ago. and augmenting our participation in nato's airport policing mission on the baltic peninsula. >> hagel also said nato's supreme allied commander, general phillip breedlove, is convening ministers of defense as a move of solidarity. and minutes ago, nato staid it would no longer need europe's help to protect the vessel that's being used to destroy syria's chemical weapons. the pentagon has suspended all

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military engagements with russia, including two upcoming exercises involving russia, norway, and canada. there is one good reason that some in the pentagon have been reluctant to take russia head-on over ukraine. for one, russia controls a very essential supply route into and out of afghanistan, which will be needed in order for the u.s. to withdraw from afghanistan by the end of the year. the route is known as the northern distribution network and the pentagon has grown to rely on this shipping route that crosses through russia since pakistan has closed the two main more direct border crossings out of afghanistan to punish the u.s. and nato for drone strikes targeting the taliban and al qaida lead pakistan. this has led to the pentagon being forced to use the longer, more costly supply route through central asia and russia, a supply route that gives russia a lot of leverage over the u.s. military in afghanistan, where, of course, there is still more than 33,000 u.s. troops. shepard? >> jennifer griffin from the

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pentagon, live this afternoon. jennifer, thanks very much. so many people across the united states and beyond asking, how come nobody knew this was about to happen? if president putin had this plan to go in and essentially take over crimea, how'd we miss it? katherine harris works intelligence for us and is live from washington for us. katherine, is there an answer yet? >> confirming new details of these assessments, analysts confirming the friday there would be no russian movements for 24 hours, while analysts at the cia left the door open, and by friday, russia had taken over the crimea peninsula of crimea. today, the head of the house intelligence committee who is launching the review defended the analysts who wrongly concluded that the russian troop buildup was a bluff. >> i don't believe it was an intelligence failure. i think we had all the collection points were good. there were indicators that there may be some troop movement. one agency got that right and another agency didn't get it right, so what we're going to do is have a review, look if there

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were any on the ground collection intelligence gaps. >> one source telling fox news that they are evaluating what the intelligence community assesses about putin's personality and decision making and whether there's a fundamental gap or lack of understanding that led to the faulty assessments. by example, in 2008, putin faced a similar scenario with limited options, but he demonstrated a willingness and ultimate capability to go into georgia, which also blindsided the u.s. a spokesman for the nation's intelligence chief, who oversees the agency, says the intelligence community has provided timely and valuable information that has helped policymakers understand the situation on the ground and make informed decisions. that continues to be the case today. any suggestion that there were intelligence shortcomings related to the situation in ukraine is uninformed and misleading. the cia also defended its analysts, saying they left the door open for that military

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option, shepard. >> catherine herridge reporting from washington. very interesting they said there were no gaps, though this happened without anybody knowing about it. maybe at some point we'll find out how those two things come together. one of the great hopes here is maybe sergey lavrov from russia and secretary kerry's meeting may bring some kind of resolution. we'll take a short commercial break. i'm shepard smith live in kiev with the continuing crisis in ukraine. okay ladies, whenever you're ready. thank you. thank you. i got this. no, i'll get it! no, let me get this. seriously. hey, let me get it. ah, uh. i don't want you to pay for this. it's not happening, honey. let her get it. she got her safe driving bonus check from allstate last week. and it's her treat. what about a tip? oh, here's one... get an allstate agent. nice! [ female announcer ] switch today and get two safe driving bonus checks a year for driving safely. only from allstate. call an allstate agent and get a quote now.

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just another way allstate is changing car insurance for good. just as we went to the commercial break, secretary kerry did, indeed, begin speaking. live from paris. >> the countries that came to paris today for this very important and timely meeting are all of us bound together by a very strong commitment to lebanon. as syria's conflict spills over lebanon's borders and as the refugee crisis grows, we are deeply concerned for the security and sovereignty of the people of lebanon and their simple ability to be able to chart their own futures and fulfill the same basic aspirations that they share with everybody else on this planet.

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the president pulled out and showed me a very dramatic charting that goes for the last few years, four different charts, that show you the extraordinary change in lebanon of numbers of refugees, as every year, upwards, the entire country has become a splotch of red. instead of red dots, the entire border is really red today because there are almost a million refugees in lebanon. this has an extraordinary impact on the internal dynamics of a country. people who are looking the for work, people who work for less, it drives wages down, it changes the nature of that nation. so the united states is very proud to have provided lebanon, just in the last year or so, with respect to its development process, $340 million the last

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new years, in humanitarian aid, and we will continue to support the lebanese armed forces and other security institutions. of course, you can't talk about the values of sovereignty, security, and determination and economic opportunity without coming quickly back to the events of the last days in ukraine. ukrainians told me yesterday in kiev how desperately they want a government that has the consent of the people. and an economy that gives them a chance to be able to live just like everybody else. i told the story of a person who had been to australia, who came back and said, we just want to be able to live the way other people live, the way we've seen them live. well, today our fellow foreign ministers and i met separately with our ukrainian counterpart,

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the foreign minister, and our russian counterpart, foreign minister lavrov, and we met as a group also. a group of concerned countries. we agreed to continue intense discussions in the coming days with russia, with the ukrainians, in order to see how we can help normalize the situation, stabilize it, and overcome the crisis. and those intentions are intentions that are shared exactly as i have described them between russia, the united states, the european countries, and ukrainians who were here. all parties agreed today that it is important to try to resolve these issues through dialogue. the united states, with our partners, is focusing intensely on a remedy. and i don't -- i don't believe,

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as any of us believe, president obama doesn't believe it, i don't believe the other countries we're working with -- i know they don't believe that any of us are served by greater or further confrontation. and also, we met today to discuss these issues, because we cannot and will not allow the integrity of the sovereignty of the country of ukraine to be violated, and for those violations to go unanswered. russia's violation of ukraine's sovereignty and territorial integrity has actually united the world in support of the ukrainian people. and this morning secretary hagel announced that the defense department is taking concrete steps to reassure our nato

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allies, steps like expanding our i have auation detachment in poland and our contributions to the baltic air policing mission. this is on top of other steps that the united states has already taken. steps like suspending our bilateral discussions with russia and trade and investment. suspending u.s./russia military engagement. and suspending preparations for the g-8 summit in sochi. now, as i said yesterday in kiev, and as president obama has said as well, and as i said to foreign minister lavrov today, russia made a choice. and we have clearly stated that we believe it is the wrong choice, that it is the choice to move troops into crimea. russia can now choose to de-escalate this situation and we are committed to working with russia. and together with our friends and allies, in an effort to

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provide a way for this entire situation to find the road to de-escalation. the united states is ready to work with all parties to make that happen and to make it happen as soon as possible. we renew our call for russia to speak directly with the government of ukraine, to send troops back to their bases and to welcome international observers and human rights monitors and we've seen today what happened with special envoy sirry, just how important it is to ensure the safety of those monitors and of those observers. ukraine's territorial integrity must be restored and must be respected. from lebanon to ukraine, the united states stands ready to help our friends in a time of need. and today, those needs, obviously, are great in different places, different

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kinds of needs in different places. we, especially, thank our friends here in france for their partnership as we work to address these challenges and many others. for instance, iran's nuclear program, we're working together. violence in the central african republic, we're working together. the pursuit of reconciliation in mali, we are working together. all of these efforts require international cooperation. so, coming together as a community of nations, as we did today, the the best way to resolve these kinds of problems that concern us. and today, i believe we initiated process that over the next couple of days, that we hope can bring us to that de-escalation and to a path for the protection of the integrity of the country and for the building of stronger relationships between other nations. on that note, i would be delighted to take any questions.

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>> our first question comes from ann guerin of "the washington post." >> thank you, mr. secretary, you just renewed to speak directly to. you were hoping that would happen today, right, here with love love and the ukrainian foreign minister who accompanied you here apparently for that purpose. why did that effort fail and from the russians that they might be willing to have that kind of conversation in the future? >> let me make it absolutely crystal clear, i had no expectation, zero expectation that today that kind of a meeting could take place. i did not expect it and we did not ask the foreign policy to come here for that purpose. so the premise of the question is really just not factual in

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terms of what we were expecting. we brought him here, because we knew it was inappropriate for us to have discussions with mr. lavrov, whom i knew i had a meeting, without being able to consult with our ukrainian friends. and it would have been inappropriate for us to come here here to paris and, and if ar group of nations to join together and make some kind of an agreement without the appropriate consultation and engagement and involvement and sign-off from the people who are concerned. this is a ukrainian decision. and we respect that. so we met, all of us, as a group of foreign ministers, with the foreign minister from ukraine. we went through the something we had discussed today. i will be in touch later tonight with the foreign minister as well as the prime minister of ukraine. they're traveling to brussels

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tomorrow morning for meetings with the eu. i will also continue the discussion with foreign minister lavrov in rome tomorrow. foreign minister lavrov will then return to have discussions with president putin, which he also did today. he'll continue to have that discussion. and i will, obviously have an opportunity to have discussions with president obama and the white house in order to discuss the road forward. but we had very thorough discussions today, very extensive, exchange ideas. we both have thoughts to take back to our capitals and to our respective bosses. and i intend to do that with hopes that the ideas that have been put on the table today can lead us to that place of de-escalation that i talked about.

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[ speaking foreign language ] [ speaking foreign language ] >> well, they switched to french and that's clearly not helpful for our purposes, but we'll go back to secretary kerry if he starts speaking english and says anything of interest. what we learned in the last few

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minutes is nothing. what we learned is that the foreign secretary, secretary lavrov, sat down with secretary kerry for some degree of time. we know that secretary kerry told him what's happening in the ukraine. back to kerry who's speaking english. we'll wrap this up in a minute. >> -- having serious conversations which produced creative and appropriate ideas and possibilities for how we can resolve this. i think that we have a number of ideas on the table. i personally feel as if we have something concrete to take back and talk to president obama about, so that i can get his input and thinking and advice on what he's prepared to do. and i believe that foreign minister lavrov is in exactly the same position with respect to president putin. i don't think any of us have an anticipation that we were coming here, at this moment, in this

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atmosphere of heightened tension and confrontation, that we were suddenly going to resolve that here this afternoon. but i believe we are doing what is appropriate and what offers the best chance of finding a way forward, that the world would welcome, that is without conflict. as we said, we agreed today, both sides and the ukrainians also, that we are all better served if this can be resolved through dialogue. that's important. i think it was a strong indication in the conversations that took place, not just between us, but between us and our capitals, that everybody is taking seriously the effort to try to find a way forward, but a way forward that satisfies the needs, that protects the integrity and the sovereignty of the state of ukraine and one

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that, obviously, charts a path forward that has respect for the people of ukraine and the direction that they have chose ton move in. so, i look forward to the conversations over the course of the next days and we'll see where we are. but i think today was very constructive. without promising something that is not defined yet. without raising hopes that are inappropriate to raise. i want to be realistic. this is hard, tough stuff and very serious moment. but i would rather be where we are today than where we are yesterday. >> and a final question from margaret brennan. >> thank you. thank you very much, mr. was there anything in your direct conversation with sergey lavrov today that makes you believe that russia is no longer

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creating a pretext for further invasion? and did you hear anything that would assure you, make you rethink the u.s. threat to put sanctions on russia? that threat seems to have been weakened by european reluctance. >> i don't think it's been weakened at all by what you call european reluctance. the conversations that i have today with the foreign minister of germany, the foreign minister of france, the foreign minister of great britain, with the eu representative, and with a number of other foreign ministers indicated to me that people are very serious about that. there's been no movement away from the possibility. and everything i said yesterday and the day before and through the week stands. that that is where we are. that we are pursuing, as president obama indicated he would like to in his comments

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yesterday and the day before, as i indicated on sunday in my comments on television shows, we would prefer to find an appropriate diplomatic solution to this. and i think everybody is better served through that. but we've also made it clear, our determination to stand up for the integrity and the sovereignty of this nation, our disagreement with the choice that russia has made, and our hope that we can find a way forward that respects the rights and aspirations of the people of ukraine writ large, east, west, south, all of ukraine. that's our goal. nothing has changed with respect to that. and what the europeans choose to do is, obviously, their choice. we've made it clear that the decision of going to crimea is not without cost. and now we need to go forward and see if we can avoid

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everybody being put in a corner where it's more and more difficult to find a path that presents you with a solution of dialogue. i was encouraged today that russia indicated that they would prefer to see us be able to find that path. that's the beginning of a negotiation. and as i said, this will go on, this discussion, for whatever period of time to come. but our position has not changed one bit. thank you all, very much, appreciate it. thanks. >> that was secretary of state john kerry speaking after his meeting there with the russian foreign minister, sergey lavrov, speaking from paris. and indicating, reiterating some of the things he said on sunday. our position has not changed, this is unacceptable. he also said that european

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nations would absolutely join in on any further sanctions that were necessary against russia. since he said that, there has been zero indication that the european nations are on board with that. in fact, white the contrary, it would appear, at least, from the germans, who would be crucial in all of this. secretary of state kerry said that he was encouraged by what he said, from the foreign ministers who were there on scene. and if that is the case and they would be willing to sign on to some sanctions, that is breaking news. in fact, he was not specific about any of that. what we did learn is he had a lengthy discussion from senator lavrov, that the representative from ukraine was there as well. that john kerry spelled out what it is the united states wanted. we heard nothing about the russians said in response. we do not expect to hear from sergey lavrov. secretary kerry said he'll take all of this back to the white house and he hopes in the days forward that they may be on a path towards getting this situation under control. russia has invaded the south of ukraine. it has taken over the military installations there, it has taken over many of the

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government institutions, it's taken over a missile defense shield system location there today. it, in essence, runs it. you don't see it on the streets, but it is a fact. and it would appear, at least for the moment, after this meeting tonight, that the united states and europe can't do anything about it, at least for now. so where did all of this begin? it began in 1994. ukraine was a nuclear nation after breakup of the soviet union. then three parties got together to sign an agreement. they were russia, the united states, and great britain. and think all said, in essence, we're not going to try to gain any advantage by working for or against ukraine. we're going to respect their territorial sovereignty, and we're not going to enter into any agreement that would give you leverage over the others, which is where this began. because the russians entered into an agreement with the ukrainians, under the previous administration. and when they did that, you could see that as a violation of that 1994 agreement.

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which should bring some sort of action. let's get right to our senior judicial analyst, judge andrew napolitano. judge, correct me if i'm wrong on any of those matters. and is it a violation, or is that you want for interpretation? >> you're not wrong, shep. and it was, as usual, an excellent summary, not only of what we just heard from secretary kerry, but of the history of this region. look, the violations of the law, local and international law, are profound and except for the words from president putin, essentially undisputed. to introduce military force into another country without then consent or invitation of the other country is a violation of a half dozen treaties. guess what, russia sits on the security council and will veto anything. that remdy is not going to happen. russia has already violated the laws of world in the geneva convention, shep, by having

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those people, who you observed on the streets yesterday when you were in crimea, they look like soldiers, but they have no insignia indicating what country sent them there, and it sounds like a novel, but it's not, and they're wearing white masks. you saw all of this with your eyes. there they are. that is a profound violation of international law. because without the military insignia, they are quite literally outlaws, and they may be attacked, physically with impunity, by ukraine forces or ukraine citizens. probably not going to happen. >> is there a remedy of any kind, legally speaking? is there a way to hold president putin accountable for his actions? or is the rest of the world left in a sort of soft malaise where there really is no remedy? >> well, i suppose the united states could scramble some jets, but that's not going to rattle him, because he knows we're not going to use the jets, other

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than for appearances. the only remedy that might make him open up his eyes would be an economic one. but because it takes a long time for an economic pinch to be felt, for the pain to be felt, this is not likely to have an immediate effect. that would be lawful. it would be impossible without germany. let's say germany goes along with it. whatever they decide to do, something that would devalue the effect of the ruble, something that would cause a mass panic the throughout russia. it would take a while for it to happen. it's impossible to embarrass president putin. he seems only to respond to force. as you pointed out earlier, the last time he did this, in the presidency of george w. bush, when they invaded georgia, they kept two provinces of georgia and they're still there. >> judge napolitano, live with us in new york, judge, it's good to see you. thank you for this. we talk about the leverage of the united states in europe do not have. we've discussed some of the leverage that president putin does have.

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partly, he has the energy, which flows underneath ukraine and supplies so much of europe. and more than that, he has now threatened, we are told, to no longer use the united states dollar as a currency on the world market. what if he did that? maria bartiromo from the fox business network will join us next to talk about the ramifications of such a thing. whether he could do it and what it would mean to our economy. would it, as the russians say, cripple our economy? that's next. t!

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your auto and home insurance. call liberty mutual insurance at... [ thump ] to speak with an insurance expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. personalized coverage and savings. all the things humans need to make our world a little less imperfect. call... and ask about all the ways you could save. liberty mutual insurance. responsibility. what's your policy? 14 minutes before 11:00 at night here in kiev. we've talked about the leverage that the united states and europe do not have. what kind of leverage does putin have? well, two things being talked about today. one is money. maria bartiromo here with us to talk about what happens if the russians, as promised, abandon

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the u.s. dollar as a reserve currency. and jonathan hunt here with us as well, our chief correspondent, to talk about the enormous energy advantage that the russians have. jonathan, the energy runs right under ukraine. >> yeah, shep, if you could have had missiles with a weapon of choice in the last cold war, energy is russia's weapon of choice in what could be the new cold war. president putin has been pushing energy deals with european nations, building a vast network of russian-controlled pipelines. now germany and belgium get about 40% of their natural gas from russia, poland about 50%, ukraine, itself, around 70%. and back in the winter of 2006, russia's state-controlled gas prong turned off the switch going to ukraine and west europe. it was, according to experts we spoke to then, a clear warning shot. >> rebirth of the strength of the russian state and of the

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kremlin in moscow, by using energy as a tool to say, if you don't do what we want, you'll be at risk. we'll threaten you, you won't be able to survive, your businesses will shut down and your people will freeze. >> again, that was back in 2006. they ignored those warnings and germany bake one of the european nation's most independent on on russian energy. we asked the former chancellor about his close relationship with russian energy companies at the time. listen. >> could we talk to you about the pipeline project? is there a conflict of interest with you being involved, sir? mr. schroeder, have you sold out your country? no answers then and now europe is in a situation where it has few options of putting pressure on russia, a lesson that some countries are finally learning, according to one analyst we spoke to today. >> what the russians have done now is they have encouraged europeans to actually spend the money they didn't want to spend

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to build the infrastructure to further diversify their sources of natural gas away from russia. >> but weaning itself off russian gas is very much a long-term project for europe, and if germany, as the economic powerhouse of the region, doesn't want to pick an economic fight with russia, the rest of europe, shep, will fall in line with the german lead. shep? >> jonathan hunt with the energy leverage that putin has. thanks. now to the money leverage. an astounding -- or i shouldn't say accusation, but seemed like a promise today from the russians saying, don't mess with us, because if you do, we'll stop using u.s. dollar as reserve currency. what would that do? let's turn to maria bartiromo from the fox business network. she's the host of opening bell with maria bartiromo weekdays 9:00 a.m. eastern time on the fox business network. maria, what about it? >> shep, i think that would further isolate moscow from the rest of the world. the fact is, this is not a new idea, not to use the u.s. dollar

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as a reserve currency. a number of countries have discussed this, led by russia over the last several years. as the federal reserve was putting in quantitative easing or the federal reserve stimulus, other countries were upset by this, because it basically made their currencies much more expensive, it weakened the dollar. so you've had countries like russia, the brazilians, all talking amongst themselves and saying, we want to create a basket of currencies to become the world currency, the reserve currency, and frankly, it has just not worked. the fact is, 60% of the world currency reserves is held in u.s. dollars. so not using the dollar as a reserve currency would only isolate russia further from the rest of the world. the fact is, the capital flight has begun. people are seeing this reaction from putin and taking their money out of the country. so it is already working against him. in addition to that, europe, of course they are going to be reluctant to do this, because europe could actually see catastrophe if, in fact, we see a stoppage to that coming into

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the country, as jonathan just told us. i mean, they would need a backup plan there, because the eu is the largest trading partner of russia, and the gas coming from russia through the ukraine is obviously critical to their economy. so europe does be hugely disadvantaged, but as far as not using the dollar, sounds unlikely to me, shep. >> maria bartiromo back in new york for us. maria, thanks a lot. so secretary kerry has gotten some sort of discussion with sergey lavrov from russia. says he'll take it back to the white house. we'll go to ed henry at the white house for reaction next. ♪ [ male announcer ] evenore impressive than the research this man has at his disposal is how he puts it to work for his clients. morning. morning. thanks for meeting so early. co on in. [ male annncer ] it's how edward jones makes sense of investing. ♪ the joint is jumpin'

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as if the white house needed

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another political situation to deal, it now has one. republicans are, of course, in many cases, blaming the president for not acting properly, as they put it, toward helping put putin in his place regarding his invasion of crimea. let's get to ed henry, who's at the white house. we just heard from secretary of state john kerry, that he was going to bring his discussions with sergey lavrov back to the white house. i wonder if you got any heads up? >> reporter: certainly, but what i've been hearing from top officials here is that what secretary kerry was discussing with sergey lavrov is what they're calling diplomatic exit ramps, to get putin out of ukraine, frankly. and this is what the president was discussing yesterday with the german chancellor, angela merkel. she's become a key conduit here to putin because of the russian/german ties. she's been on the phone multiple times with putin in the last few days. the president has only spoke to him once, as you'll remember.

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but the merkel/obama call yesterday lasted about an hour. and they were talking about getting monitors in from the u.n. and other organizations to try and calm the situation down. the bottom line is, while the president, as you noted, have taken a lot of hits from republican critics right now, they feel good inside the white house that this situation is calming down. they also feel like there's a lot of pressure on putin. number one, he's isolated. and number two, his economy is very fragile right now, shep. >> his economy is, indeed, fragile. ed henry at the white house. but certainly, no movement. the russians still are, in essence, controlling crimea, even as we speak. some final thoughts and a look at the dow before it closes and we send you off to neil cavuto, right after this.

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well, as the world talks about leverage and politics over the situation here in kiev, as we approach 11:00 p.m. now, this is the spot that is of utmost thought for people here. that's the spot where the government built a wall, put police on top, and murdered

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citizens and kiev is still a city in mourning. pick an uprising, any uprising, not just this one, any one. egypt, libya, syria, now ukraine, save that story, but billions upon billions of dollars later, how are we changing that story? welcome, everybody. i'm neil cavuto. and here we go again. the white house now offering $1 billion in aid to help out a fledgling government in ukraine. the administration calling it technical assistance to help ukraine rebuild its shattered economy, as it continues to face down a military threat from